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Keeping Cattle Profitable

Agriculture.com Staff 02/06/2016 @ 1:24am

Research has revealed that cutting back in certain areas, like parasite control, can actually increase the overall cost of production.

John Lawrence, economics professor at Iowa State University, and his research associate, Maro Ibarburu, recently reevaluated and updated research they did in 2007 based on increases in cattle and feed prices.

"The original data was based on feed and cattle prices prior to the recent increase in these areas," says Lawrence. "Now the question is, does the increase in feed and input costs make a difference in the effect of efficiency-gaining technologies? The answer is yes."

They conclude that of all the pharmaceutical technologies examined, parasite control in cow herds has the greatest effect on breakeven prices -- providing a value of $201 per head. This represents a 21% increase from similar data reported in 2007.

Ionophores, antimicrobials, beta-agonists, and dewormers improve the average daily gain and/or feed efficiency for feedlot cattle. Growth-promotant implants also allow producers to finish cattle to a higher weight without affecting the carcass fat percent.

The breakeven price went from $83/cwt in 2005 to $89/cwt in 2007. The cost per head increased by $81 between 2005 and 2007.

When compared with the second most important practice to a cow/calf herd (the use of growth-promoting implants), parasite control is almost six times more important to breakeven cost. Producers who use parasite control can expect an advantage of 23% in weaning rate and 4% in weaning weight. These advantages equal a return of $201 per head based on the use of parasite control.

The stocker operation analysis looks at the effects of pharmaceutical technologies on average daily gain. If the average daily gain decreases, cattle are kept longer, which, in turn, results in higher feeding costs as well as higher operation and labor costs.

Research shows the breakeven price went from $105/cwt in 2005 to $99/cwt in 2007, and the cost per head decreased by $41 from 2005 due to 9% lower calf costs. Cost savings when using pharmaceutical technologies increased from $81 per head to $95 per head due to higher feed costs.

Lawrence says to think more about long-term effects of decisions. "The message is the same as it was before, but now even more so," he says. "Efficiency-gaining technologies, such as parasite control and growth promotants, are now even more valuable in improving performance and reducing cost for producers."

Research has revealed that cutting back in certain areas, like parasite control, can actually increase the overall cost of production.

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